Crossrail and 'W5 exodus' seen as factors in continued rise

The average price of a home in West Ealing has continued to increase having already been at record levels.

During 2015 the level in the W13 postcode area reached an all time high, having risen by 9.1% over the year.

An average terrace house in W13 will now cost around £740,000 more than in W5.

Agents say the logical reason for this increase is down to Crossrail, with two stations (West Ealing and Ealing Broadway) to choose from, W13 is becoming a prime location for new buyers.

Ray Upcraft from Russell Collins estate agents says movement within Ealing is also to blame, ''Some ‘'W5’' people have moved to W13 simply because it was (but not any more) better value and they have pushed prices up, without even realising it.''

W5 prices appear to have slightly lagged behind W13 but the structure of the market here is undergoing a substantial change – over the past five years the number of houses sold is broadly unchanged but the number of flat sales has risen by 150%.

The increase in new builds such as Dickens Yard, and Cavalier House in the centre of Ealing has resulted in 116 flats sold in the fourth quarter of 2015, compared to 35 in W13 in the same period.

Agents are speculating over what changes are to be expected in the flat market in April as Buy to Let (BTL) landlords may begin to feel the pinch. Stamp Duty Land Tax (SDLT) is to be increased for most purchases of buy to let investments from April 2016. Under the new rules, the rate of SDLT on the purchase of a buy to let property, or indeed on the purchase of a second home costing more than £40,000, will be subject to a 3% surcharge.

Ray Upcraft, of Russell Collins estate agents says, ''The stamp duty change seems to have had little effect on the Ealing market. This is probably because Ealing does not offer a great yield any more so many people are looking further out for an out and out BTL. Ealing is a great place as a long term investment which is subtly different from a BTL  property. 90% of our sales are to those that want to live in the property so we will not be affected once April 1st is here.''

However Donald Collins from Go View London says, "There could be a knock-on effect in the market given that that in the past few years we, like all leading agents, have sold a lot of property to investors. 

''If you are making market conditions more difficult for this segment of the market, given an increase stamp duty and removal of mortgage interest from their tax calculation from 2020, then there could well be a knock on effect in terms of value and there is no point in sugar coating this or pretending that things will not be affected.

''Against this of course, there are 100,000 working-age individuals due into London every year for the next 10 according to the office of National Statistics and overall, the market has always been robust in my career as an agent and I think will continue to be so.'' 

Property prices across London rose by 12.4% in 2015 according to the Land Registry bringing the average price of a home in the capital up to £514,097. This was the highest rate of increase in the country.

The average property value in England and Wales was up by 6.4% £188,270. Monthly house prices rose by 1.2% since November 2015.

Sales and repossessions during October 2015, the most up-to-date figures available, show that the number of repossessions in London fell by 71%

The London housing market has seen a fall in newly agreed sales for a third month in a row according to the latest RICS UK Residential Market Survey. Despite an increase in demand across the capital 2% more surveyors have seen a fall in newly agreed sales over the last month, adding to the picture from October and November.

Their report for December 2015 has shown that demand for new properties has reached a three-month high, with Chartered Surveyors citing a rush to beat April’s stamp duty rise as the reason.

From April, buy-to-let investors will be required to pay 3% more in stamp duty charges than residential buyers looking to purchase the same home. Since the Chancellor announced these measures in the Autumn Statement last November, 10% more Chartered Surveyors in London reported a rise in new buyer enquiries but with new instructions flat prices are continuing to rise - average sales per surveyor are at just half of what they were in June 2014.

RICS Chief Economist, Simon Rubinsohn said, “The housing market has experienced an unusually buoyant December. Those in the industry have been speculating that this is the result of the Chancellor’s announcement last November. Potential buy-to-let investors are looking to pick up properties before the increased stamp duty levy comes into force in April. If that is the case, then we can expect to see the housing market heating up further over the next few months.”

The survey also predicted that house prices in London look set to rise by a further 5% per annum in each of the next five years, compared to a UK average of 4.5%, with 57% of contributors in the capital believing that property was either ‘expensive’ or ‘very expensive’.

A net balance of 25% of respondents reported that London house prices had risen since November, substantially lower than the national average of 50%, however price expectations remained strong with a 30% more London surveyors predicting a rise rather than fall in prices over the coming three months.

In a forthcoming edition of the Ealing Today newsletter there will be a complete listing of recent property sales in the area. To register to receive it click here.

Data in this report is subject to crown copyright protection.

February 18, 2016